Eurozone growth outlook lowered

The euro area has had trouble cranking up its economic engine ever since emerging from recession in 2013 and has grappled with high unemployment and low inflation. The European Commission said Tuesday it expected the eurozone economy to expand by 1.6 percent this year and 1.8 percent in 2017, lowering its predictions by 0.1 percentage points.

"The recovery continues, but the global context is less conducive than it was," Commission Vice President Valdis Dombrovskis said in a statement in Brussels.

He added current risks included a slowdown in economic activity in China as well as geopolitical tensions around the world.

Spain and France in focus

Dombrovskis also mentioned the impact of uncertainty ahead of Britain's June 23 referendum on EU membership. Although the UK is not part of the euro area, a vote in favor of a Brexit could bring years of imponderables as London would have to negotiate its new relationship with the bloc.

The Commission's spring outlook made it clear that officials in Brussels were worried about Spain, which was predicted to miss its economic goals this year. The EU executive forecast Madrid's deficit to hit 3.9 percent in 2015, way above the allowed 3 percent as stipulated in the bloc's financial rules.

It added that France would also have to undertake further efforts to bring down its fresh borrowing as the nation's deficit is expected to come in at 3.4 percent this year and 3.2 percent in 2017.

hg/cjc (AFP, dpa)